Reduction in interest rates reinforces an optimistic scenario for the economy %%page%%

On August 2, COPOM, the Monetary Policy Committee of the Central Bank, announced a reduction of 0.5% in the basic interest rate, which puts it at 13.25%. For João Ricardo Tonin, economist at FoodCo., the news is encouraging and reinforces the good expectations for the year 2023.

Firstly, the economist points out that Brazil is always among the three countries with the highest interest rates in the world, even without having very high inflation. As a result, the country becomes more attractive for investment in securities, rather than direct investment in the private sector.

Furthermore, Tonin believes that this half-percentage-point reduction is just the beginning, and further reductions should be seen during upcoming central bank meetings. The expectation is that the year ends with the interest rate at 11.75%. Lower interest rates create more possibilities for debt renegotiation, which makes it possible to reduce defaults.

The reduction in interest rates also opens doors for business expansion, with the acquisition of competitors through loans, for example. Despite this, the economist points out, bank debt continues to be a challenge for businessmen and families, since credit is still treated as income expansion.

“The tip in this case is to concentrate the debts in a single financial institution and seek a portion that fits our daily payment capacity. It is important to avoid paying in installments using your credit card and using an overdraft, as there are other financial products on the market with similar characteristics and much lower costs. Anyway, the time has come to review our expenses, tighten our belts, and take advantage of market opportunities, which are increasingly strengthened in the second half”, concludes Tonin.

The FoodCo. with the complete and audio analysis of the economist João Ricardo Tonin is an exclusive weekly content for the platform’s subscribers. FoodCo. is the largest community of bar and restaurant owners in Brazil. There are more than 13,000 entrepreneurs in the sector gathered in a network of knowledge and networking, with access to essential content for those who undertake food outside the home.